MediaTek profit hits nine-quarter low
MediaTek Inc. ( ), one of Taiwan’s leading integrated circuit designers, saw its net profit for the second quarter of this year falling to a nine-quarter low due to the slow season effect.
In an investor conference held Friday, MediaTek reported NT$ 6.38 billion ( US$ 203 million) in net profit in the second quarter, down 12.1 percent from a quarter earlier, with earnings per share of NT$4.06, compared with NT$4.62 recorded in the first quarter.
Market analysts said that during a product transition period, which slowed demand in the second quarter, MediaTek’s consolidated sales for the AprilJune period fell 1 percent from a quarter earlier to US$47.04 billion. Even worse, the analysts said, price competition has hurt the IC designer’s gross margin, which fell 1.4 percentage points to 45.9 percent.
Looking ahead, MediaTek Vice Chairman and President Hsieh Ching-jiang said the company is expected to feel the pinch of the weaker-than-expected global demand in the third quarter.
Hsieh said that fierce competition in the global handheld device market could further compromise the IC designer’s chip shipments in the July-September period.
The MediaTek executive said that the IC designer’s consolidated sales could range between NT$ 51.7 billion and NT$ 55.5 billion, up 10-18 percent from a quarter earlier. The forecast was about 20 percent lower than market expectations.
Hsieh said that MediaTek’s gross margin for the third quarter is expected to range between 42.5 percent and 45.5 percent.
With Mediatek becoming more cautious about the global market climate, Hsieh said that the IC designer’s consolidated sales for the whole of 2015 are expected to fall 5-10 percent from a year earlier, adding that its gross margin is expected to face further risks in the second half of this year.
Hsieh said that MediaTek has lowered its forecast for 2015’s smartphone chip shipments to 400 million units from a previous estimate of 450 million units, while also cutting its estimate for chips used in tablet computers by 10 percent to 45 million units for this year.
He said that MediaTek is expected to ship a total of 150 million long term evolution (LTE) chips this year to take a 20 percent share of the global LTE chip market.
In terms of its efforts in advanced technology development, Hsieh said, MediaTek is scheduled to launch commercial production of chips made on the 20 nanometer process at the end of this year, and to kick off mass production of chips made on the 16nm process in the first half of next year.